tv Squawk on the Street CNBC December 2, 2009 9:00am-11:00am EST
capital of the world, this is "squawk on the street." good morning, everybody. i'm mark haines. >> i'm erin burnett. here's what's front and center for us this morning. according to the adp report, jobs, private jobs survey, u.s. private employers lost 169,000 jobs month. mark, we're still losing jobs but that is the fewest lost in my month since july 2008. that's, you know -- >> a ray of sunshine. >> a ray of sunshine. >> don't say it. >> what? >> don't say green, you know what? >> i didn't. >> ed whitacre will take over as ceo of gm. we'll get a live report from the l.a. auto show. and phil lebeau broke that story yesterday. david faber has the late toens ge/comcast/vivendi talks. >> and mortgage applications, slightly higher last week. why? in part, because the 30-year fixed rate is still below 5%. >> futures right now are
pointing to a slightly tepid open, shall we say. less than a point below fair value. you know, very, very modest loss at the open. >> and we want to zero in on two top stories as we're framing them this morning. david faber, wheeling and dealing over the greatest asset on earth, "squawk on the street." but first, phil lebeau is live in the l.a. auto show. the ceo is out. good morning, phil. >> good morning, erin. yes, more changes coming for general motors. unclear exactly what the immediate future holds with a new ceo in place. but as for the previous ceo fritz henderson, he's gone. after eight months on the job, fritz henderson asked to step down yesterday at a gm board meeting. and so he does. he leaves. and really the down fall for him, deals and changes at the company not coming fast enough. at least not fast enough for the company's chairman and new ceo. here he is.
ed whitacre, chairman since june and now takes over day-to-day of running it. his top priority remains as it has been since he became chairman, to change this company and move it back to profitability as quickly as possible. >> you know, i remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks. but we now need to accelerate our progress toward that goal, which means a return to profitability and repaying the american and canadian taxpayers as soon as possible. >> not all of the old guarded general motors has left. bob lutz, the virs chairman, remains with the company. he will be out here at the l.a. auto show giving the key note address. it was supposed to be fritz henderson. obviously he's not going to be coming out here. bob lutz expected to talk later
this morning or he will talk later this morning. it's expected he's going to get a fair number of questions regarding the changes. don't forget coming up later on this hour we're going to talk with mark fields, president of the americas for ford regarding ford's turn around. ford introducing a new vehicle out here at the l.a. auto show. a company that's been on a roll and a company that knows what it's like to go through turmoil and changes. we will have that coming up later on this hour. now, for the faber report, let's send it back to david faber. david? >> thank you, phil. less than 24 hours from now we will get that announcement of a deal we have been talking about for some time, the transfer of control of nbc universal and what will be the largest media deal in quite some time from ge to comcast. take a look at what the deal will look like. nbc universal will be spun off, $9 billion in debt. somewhere around three times its yearly generation of earnings before interest, taxes,
depreciation, and amortization. of course, as we reported, comcast will contribute its content asset, things like the e channel, the golf channel and other sports networks and the like. $6 billion or so in cash will also go in. and at the end of the day, comcast comes out owning 51%, ge 49%. the ability to sell down that stake over time. and nbcu, you know, we'll see what the numbers ultimately look like. they may have changed a bit in terms of the performance of the business. but roughly 11 times is what bankers have been telling me working on this transaction for quite some time. maybe it's closer to ten. somewhere around there. you're going to have a regulatory review that many expect will go on for apartmet a year. few however expect that there will be any major impediments to that closing. none the less, likely to bring up any number of issues, including a la carte cable prices. john mccain, they like this
issue. net neutrality, a huge issue. the they push that, the idea that broadband providers can not tier pricing despite what may be broadband hogs versus people who don't use as much. and retransmission also going to be a key point that comes up in general and something a number of media investors have mentioned to me over the last few years that could become important here, namely the willingness of comcast to pay nbc for the right to retransmit that signal or affiliates, maybe higher revenue stream for the likes of cbs and/or abc. they can both use it. finally, you know, interesting when we get the announcement to talk about ge's -- plan it took here, the path it took, i should say, to get to this point. why didn't it talk to other potential buyers for this asset? when i spoke to john malone a couple weeks ago he indicated that both rupert murdoch and
himself had interest but ultimately couldn't really get a kons conversation going. >> he couldn't get in the -- in the act, nor could we. and, you know, they really, i think, have so customized this transaction that it's so special, especially designed, that i don't believe anybody else can meet the mutual objectives. >> of course, the structure of this transaction is going to meet the objectives of ge in order to pair its controlled stake in nbcu but contain the hedge, it will benefit. and, of course, gives comcast the opportunity to take control of content assets without putting up that much cash. less than 24 hours, mark, i promise. good to see both of you together again, by the way. >> nice to be here. let's hit the markets. we start with bertha at the big board. >> thanks very much, mark. yesterday we saw the financials kind of sit out the rally.
this morning watch the regional brank credit suisse is upping the sector. of the 13 of the 15 banks they cover they said none of those is going to have to raise additional capital. they think the fourth quarter is probably going to be the kitchen sink. upping pacific over here. suntrust and bb&t. meanti meantime, bank of america, according to the "wall street journal," the ceo candidates entire interviewing to replace ken lewis, is breaking up, something the board the not thinking about. watch the financials to see if they come under pressure. expected to vote on the too big to fail package. if they pass it, it could move to the house as early as next week. continental is saying november was good p traffic was up 3%. passengers paid less per mile. delta also saying passenger demand is returning. let's head on over to the nasdaq now and mike huckman. >> thanks, bertha. right now we are up 0.2% according to the premarket indicator on the back of a 31 point or nearly 1 1/2% gain
yesterday. that would make it the biggest point in percentage gain here in three weeks. experian hitwise is out with the cyber-monday track. amazon.com it was most visited retail website. it saw a 44% increase over last year. dell and sears also on the top ten list there. but the question, of course, is how many of those people were actually window shopping versus clicking through to an actual purchase. you almost need a starbucks barista to call out the escalating bids in the coffee wars here. green mountain is now offering 35 bucks a share for deedrich coffee and pete's coffee, once again, is saying it is mulling over what its next step is going to be because it's in the bidding war with green mountain coffee. let's go to brian at the my nymex. >> i love the coffee war. thank you, mike. listen, gold, when we hit 121840 overnight, traders don't know the day-to-day movements what is
driving it. we have the dollar firmer today. i'm going to go with historical benchmarks since technicals don't work anymore. we saw some resistance to magna carta at 1215. if we go through it, i don't know, it might be the printing press around 1440. literally, traders don't know what the movements are, especially on a day when the dollar is firm. the metals stronger for sure, although not by as much. crude, we have a situation where the dollar is a little more sensitive to it. it is down about 55 cents. we're hovering right around $78 a barrel. keep an eye on what's going on with iran. ahmadinejad is going forward with uranium enrichment. that is having an impact as well. let's go over to rick santelli in chicago. >> thanks. right now a ten-year yield is at 329. just to give you an idea, the last 13 trading days including today, have been in a closing yield range of 3.20 to 3.35.
so pretty compressed market. it's not like you're seeing wild clues as to what the treasury market is looking at down the road and maybe that is skewed to the lower yielding tight range because we're going into the end of the year. but no matter how you slice it, there are still issues in supply that might mean larger in 2010. but next week we will have 3s, 10s, 30s. dollar index is slightly improved. like 0.1 of a cent. but still looking gold, up $9. which goes to show you that a weak dollar is definitely one of the reasons for gold being higher but it's got a life of its own. mark and erin, back to you. >> rick santelli, thank you. the word on the street, the buzz beyond the trading floor both coming your way in just a few moments. and mark fields, ford motors president of the americas will, be first with phil from the l.a. auto show. how can ford keep innovating and remain the only american automaker surviving on its own?
alan, let's start with you. i took a week and half vacation. i come back, the numbers are all pretty much the same. >> we take two steps forward and one step back. we had dubai took the market down a little. we're just spinning our wheels probably in the the end of the year. i don't see any major events coming out. outside of geopolitical i think the markets are going to continue to drift higher and higher until the end of the year. i don't see any big changes. >> then i think i understand the answer to my next question. is it a good sign that we're holding firm or is it a bad sign that we can't really make significant progress? >> well, you know, it's funny. i think it's a good sign that we are holding firm. in the long run, it's just traders doing this. no investors here. just seeing traders coming to the market. we're not seeing real money come back into the market. i think next year is going to be a trying year for the market. >> really? >> i do. i think you're going to see the shorts have to cover before the end of the year. i think the market's going to close up at the end of the year higher than where we are right now.
next year could be a lot of problems with the taxes gone higher, people are going to be worried. unemployment today, okay, wasn't the worse but still not getting good. people are not hiring yet. >> that's true. we've got the get that going. >> yeah. >> thank you, alan. up stairs to erin. >> mark, thank you. let's get the buzz beyond the big board on this wednesday morning, i think. good to be with you, john. head of equities at cowen and company. i had to stop and think there for a moment. my head is sort of spinning. what are you focused on this morning? >> which time zone are you in now, erin? welcome back. what i'm looking at though is the divergence right now that we've seen in small cap versus large cap. if you think back to what led some of the rallies back from march, you had a lot of these riskier part of the curve doing very well. if you look what's diverged here in the last few weeks you had the russell 2,000 down about 7% from the highs and the s&p right around the highs. and internally if you look at that those are the benefited the most from that are a lot of the
big multinationals, procter & gamble, and kimberly and mcdonald's and walmart hitting a 52-week high. i think there's a lot of running to safety here in the big cap names. >> and just between now and the end of the year, any -- are you nervous at all when you put things like dubai into the context of jenner vousness about the rally, or no? >> i have to agree with the last guest. i think we're going to probably tread water here for the next few weeks and end somewhere, you know, around this 1100, between 1100 and 1125 on the s&p, barring any large sort of hiccup that may take place. i mean if you think about how the market behaved vis-a-vis the dubai incident, it's just hanging on. this rally which is probably one of the most hated rallies in wall street in a long time that's taken place, there has not been a tremendous
institutional sponsorship to it. >> john, thank you very much. all right. in two minutes your first look at dotcom shoppers this holiday season. the exclusive results fromcom score. >> you'ring looking at dotcom shoppers, actually. i'm one. >> absolutely. i don't go to stores anymore. >> i did literally 99%, i think, 100%. >> same with me. if i can just -- any way to do it online, i do it online. one of the best stocks of the decade up 2,000%. the ceo with us this morning. this is "squawk on the street." we'll be back. >> the bad part of that is, they don't play christmas carols in your study while you're doing it on a computer.
new survey bycom score reporting monday's shopping sales rose 5% to $887 million versus a year ago. that's the heaviest one on record which is 2008. in a "squawk on the street" exclusive here's john, the chairman of comscore. thanks for joining us. is it going up from here? >> well, it got off to a pretty strong start. i think everybody is hope that we get a continue to see growth through the balance of the year. i think it's doing to depend on the degree to which he's retailers are going to continue to push out the promotion offers they've been running. >> in terms of the number of transactions, i'm curious. the dollar amount obviously up 5%. were people buying a bit less and therefore were more people transacting business within a year ago as well? >> exactly. we saw a marginal drop in the total dollars spent per buyer,
which i don't think is surprising given the cash situation that a lot of consumers are in. but the number of buyers were up 6%. pretty clear that people are getting more -- more people are getting comfortable shopping online. >> excuse me, sir, mark haines here at the big board. >> yeah. >> is there a rough figure -- i realize you may not have the exact number. how much of the total holiday shopping is done online, what percentage? >> if you exclude food and gasoline, those kinds of things, it's about 8% to 9% of all consumer spending is now done online. >> so there's a lot of room still a lot of room for growth. >> there is indeed a lot of room for growth. i think that's why most people are bullish on the continued success of online shopping. >> can you put that in some perspective for us, 8% to 9% now. where were refive years ago? >> we obviously have to recognize that these are tough economic times. the growth rate in past years
was well over 20%. so the growth rates that we're seeing here at the beginning of the season, you know, are certainly lower than which we've seen historically. but to go into the season with an 11% growth in sales on black friday and then a 5% growth on cybe cyber-monday is pretty strong. it's clear the multi-channel retailers are looking at the internet now as integrated strategy. they've been mer very aggressive with their deal this season. i think they were expecting this to be a special season. >> yeah. how many people are accessing these sites from work? >> well, that's an interesting point. we saw about just over half of all sales occurring from work computers, which is pretty much what we've seen over the years. so people still like the privacy of shopping at work. and you don't have family members you might be buying gifts for staring over your shoulder. so it's still a little component. >> and finally, i assume we expect perhaps a bigger day given last year, december 9th.
>> right. >> still to come? >> yeah. so cyber-monday matched the heaviest day that we've ever seen online. but the heaviest day this season will occur somewhere around the middle of december, which is where it typically falls. >> amazon, the largest market share? >> amazon continues to roll along. they had 20% plus traffic growth in both black friday and cyber-monday. there are other -- apple had a spectacular friday. sears had a spectacular friday. you've got walmart. there are a lot of people, i think, making money this season. >> gian, chairman of comscore. thank you. the final countdown to the opening bell on the other side of the break. also ahead, the secret to ford's success. we're going to be live at the l.a. auto show with the company's man in charge of north and south america. this is cnbc "squawk on the street" live from inglewood cliffs, new jersey.
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"squawk on the street" live from the financial capital of the world where the opening bell is going to ring in a little less than three minutes. here are your headlines. minutes before the bell. gold a new record. over $1200. gm, a new ceo. fritz henderson out and whitacre in. the adp jobs report comes in showing a less bad picture than a month ago. >> and less bad is good in the current parlance of the markets. let's count you down with the opening bell. good to have you with us, michael. so less bad, is it still good enough? s. >> absolutely. thank you, erin. what you're really seeing here is quite a dynamic in regards to the way that gold is changing and significantly why the dollar has gotten it there. for the same reason there are some historical numbers for this part of the season going back to the great war of world war ii.
we've seen an increase in the s&p of about 1 3/4%. and that's success ratio has been about 76% for the month of december. i think that what we've seen now with m and a activity, robust earnings, there's a lot of underlying thirst for yield here that what i would say significantly is going to help the equity markets and the inverse there, how is the dollar going to react against most the major currencies, starting to find a little bit of support, but for the same reasons as index itself. i just don't see gold stopping here. i think there's a lot more reason for it to get higher. >> you talk about thirst for yield. that raises the question about whether there are bubbles popping up everywhere given the unprecedented easingness. are you concerned about that? >> well, you know what, there are two sectors out there. banking and the real estate area of housing that's probably going to remain fragile and trying to not be so bruised. but i think what you're starting -- what you spoke of already about online retailing
and, of course, some of the other sectors that have done very well, like chips and in technology as a whole, i think this is just building a base. i want to use one chart, which is the two-year weekly and the s&p. we have a major resistance level up there, that 1045. it's quite a ways away but keep an eye on that. >> thank you very much, michael gurka. we appreciate that. they're jimping the gun a little bit at the nasdaq. >> yeah. we've still got -- >> a few seconds left. >> -- 20 seconds. >> the futures indicating a very, very modest drop in the dollar. we're talking five or ten points, at the most. >> yeah. >> and gold, again, up $11 at 1210. so, oh, boy, it's gotten high. here come the opening bells. here at the big board, the america, israel, french league celebrating israel day at the big board. at the nasdaq, the broadway walk
of stars foundation. >> and without further ado, market reporters standing by. down, up, we'll see how it goes. bob pisani -- or bertha, sorry, is first. hello, bertha. >> it's okay. welcome back. long commute. take a look at regional banks this morning. yesterday was a financial sitout. ren regionals did well. credit swisse did well. they don't think they're going to need to raise capital again. they're raising their ratings on suntrust and bb&t. suntrust goes to an out perform. bb&t comes up to a neutral. mortgage applications last week were up 2%. six-month lows on overall mortgages. 15-year mortgages reaching a record 4 1/4%. credit suisse upgrading kb home to out perform. they think they can benefit from a tax refund in 2010. the airlines are higher on a call out of morgan stanley this morning. they think this is a good entry point to get into the airlines.
they think the airlines will start seeing some better trend lines next year. they are upgrading amr to an overweight from equal weight. that's the leader this morning. they are downgrading alaska air though to underweight from equal weight. separately you've got continental saying that traffic was better in november. it was up 2.9% even as passengers were paying a little less for their fares. meantime, wall greens set to open here about $2 at $37.40. down about $2. they are same-store sales came in below par, just below 4%. let's move on over to the nasdaq and mike huckman. >> bertha, even though that t. broadway walk of stars just rang the opening bell i will not be doing a song and dance. we have the nasdaq come post pos is it up 0.1% after coming off of its biggest point percentage gain in three weeks here at the nasdaq. with david faber report that the deal announcement is imminent apparently with comcast and nbc universal or general electric
coming tomorrow morning, thought we would check on shares of comcast. it was up 2% yesterday with the reports that this deal was done. but right now as you can see it's up just 0.3%. with apologies to mike myers and linda richman, we've got deedrich up 10% with green mountain upping the offer to $35 a share. they are saying once again we are taking time to mull over what our next might be, whether it's going to come back with yet another counter offer. and finally, in baby bio pharma we've got a bunch of stuff going on. fda approved a drug, up 31%. novavax says its experimental h1n1 vaccine appears to be safe. and finally, they say their experimental multiple myeloma drug is up. farmersmarket.cnbc.com. let's go to brian at the ney mekz. >> a little mike myers for, you
huckman. dr. evil would have a tough time calibrating gold prices out of a 20-year shell right now. we thought 1,000 was a big ceiling and now it's the floor and basement of a ten-story building. unbelievable. it's really momentum trade when you consider the dollar is a little bit further and the euro is flat. dennis gartman of the gartman letter said he may think about lightening his position when it considers the british pound. oil is soft right now. we had bearish numbers from the api last night. we will see how that is at 10:30 a.m. eastern time when we get the eia numbers. look at the estimates. expecting a drawdown in crude and in distillates. built-in gas, but what we saw last night with the api, they had a build across the board. i also want to point out brent now trading at a premium, to nymex, light sweet crude. a lot of analysts saying with demand in asia, it might stay
that way for quite a while. mr. santelli in chicago? >> thank you very much. we low that low interest rates create a fertile virmt for gold, in addition to all the other reasons. why? it has negative carry. so we are in a liquid time. but here's something that came out traders are abuzz about. in a bloomberg interview richard clarada who is one of the key people at pimco made a statement that central banks may substitute gold for treasuries. i'm not saying i agree or i'm not saying there's a time frame in the immediate future, but think about what that comment means. of course, we are all observing that we get continued sponsorship of treasuries and those types of issues can be things that blind side was down the road. something to look at the gold, of course, not only is crossed 1200 but still sailing higher. erin, mark, back to you. >> all right.
shares of ford, up almost 2% just minutes after the open. but year to date, the stock is up much more. up 288% -- no, now 295%. phil lebeau has a first on "squawk on the street" interview this morning with one of the men behind ford's success. they are live at the l.a. auto show. philip? >> and we are here with mark fields, the president of the americas for ford. heck of a year for ford. mark was just talking about the increase in the value of the the stock price. i know all executives say, listen, we're not worried about the stock price. but you have to feel better about where your positioned now compared to a year ago. >> well, i think, you know, we're very encouraged. it's ally important in the organization to take time to kind of celebrate the moment. but then kind of get back to business, keep our noses to the grind stone and keep that sense of urgency to move the business forward. >> sales come out yesterday. 8% growth in the month of november when you adjust for sales day. you now have the fiesta
scheduled to come out next summer. when you look at the trajectory of auto sales through the next year, are we in sort of a period here where, we're kind of bumping along and we don't see a whole lot of growth in maybe the spring/summer we start to see some growth? >> it's pretty clear we have finally seen a stabilization in the industry. past couple of months, cash for clunker, hovered about 10 1/2 to 11 million units. that's encouraging. we do see the economic, we're looking at the economic metrics. it's all pointing in the right direction. but to your point, the question is, how far and how fast we'll move up. we think it's going to be really moderate. and we're going to have to track it month to month and see how it goes. i mean, the two biggest things are consumer confidence and the employment markets. you know, for folks sure doesn't feel like a recovery but hopefully it will. >> clearly the story out here is the unveiling to the fiesta. let's be honest. the news overshadowing the entire show is fritz henderson stepping down at general motors.
when you heard the news, your landed out here, you heard the news, how surprised were you and what's happened at general motors? >> you know, really can't speak to them because whatever -- there's been so much news going on in the industry over the past 12 months, literally every day you wake up, there's something else happening in the industry. and what that's really focused ford to do is just go right back to the plan. so when we landed yesterday, it's, hey, we're on the ground, here for the l.a. show, we're launching the fiesta. time to move on. >> you've been in a company. and ford was in this position not to the com agree that gm is, five years ago. a lot of changes in management. a lot of uncertainty about what was going to happen next. when you're in that position as general motors is in right now and now you're on the other side looking at it, how do you take advantage of it as a competitor? do you look at it and say at least we know we've got these product plans coming out for the next couple years, the foundation the path that is laid out there? >> i think it all comes back to coming back to continuing to execute our plan and running the fundamentals of run an effective
car and truck company. and that gets to bringing out great products to customers with great safety, fuel economy, quality and technology, getting the costs -- continuing to work on the cost structure of the business, continue to build the morale of thing or and creating a culture of wanting to win in the marketplace. we're going to continue to do what we're doing. >> change that culture doesn't happen overnight. >> you don't show a power point slide and all of a sudden the culture is changed. you have to walk the talk. in our company we've been in business for 100 years. there are some things in our culture that we've nurture and we're going to nurture and grow going forward and some things we've had to change and we're off on that journey. >> the latest sales show tremendous growth for cars. particularly for you guys. you're seeing the strength there. does that continue here for the next six months or do you think that we've seen pretty much the gains for the industry that we have seen in terms of car sales? >> well, you know, our view is we're going to continue to see a growth in the car piece of the business. particularly, small cars,
compacts and subcompacts. that's why we're launching the fiesta. if you go back, even back to 2004 and look at gas prices, they're about the same inflation adjusted as they are today, yet the subcompact segment grown about 20% compounded every year. it's not just about gas prices. we think the shift towards cars and smaller cars is going to continue. >> pickup trucks, so much is tied into the housing and construction markets. are you seeing any ray of hope there, that perhaps with the economy we're starting to see some increased activity there? >> well, from our standpoint we've been fortunate in our new products, f-150 and super duty, we gained market share this year in a segment that's down because of the housing market, and you're right, the housing market is the highest correlation to pickup truck sales. what we've seen so far is just a flattening out. we have not seen any greene shoots, rays of sunshine, whatever you want to call it, but i would call progress being
basic stabilizatiostabilization >> mark fields, president of americas for ford motor company. guys, there you have it. introducing the fiesta, but clearly there is an unusual show with the gm news over-shadowing everything. >> phil, i want to throw in one question if i could. i don't know if mark can hear. i'm curious about, when you were talking agent the differences between general motors and ford and overseas gm, it's been one of the strong points and you see a lot of gms in china or russia. i'm wondering if ford is going to try to increase over seas in an area that's traditional by been one of strength for gm? >> well, erin, when you look at our performance around the world, if you look at our third quarter, our market share was up in every part of the world, including china, including europe, south america and here in the u.s. we've made significant investments a all parts of the world, including asia pacific. we just announced our third plan in china.
our approach going forward is to be very balanced, be in the markets around the world where there's growth with a full line of prusoducts. >> sorry, phil. ist just curious. >> sure. >> all right. big day in washington tomorrow. "squawk box" is going to be there. at 10:00 we're going to cover the fed chairman's trip to the hill. berber nank testi ben bernanke is going to testify. but timothy geithner, mark, is already on the hill at this very second. and here's hampton pearson to say high. >> hi, erin. the treasury secretary is testifying before the senate agriculture committee and over the counter der rer tives reform. they have jurisdiction over that aspect of the reform on the senate side. as far as the treasury secretary's prepared testimony, he's sticking to talking points we've heard before, regulating the multi-trillion dollar derivatives market is a key part of broad and thorough reform of our financial system. a key quote, the lack of transparency in the otc
derivatives markets combined with insufficient regulatory power to police the powers left our financial system more vulnerable to freud and manipulation. he does lay out the administratio administration's four objectives when it comes to regulating. preventing otc derivatives from posing risk and stability to the entire system, promoting transparency, protecting consumers, buying derivatives not marketed to unsophisticated parties. now, the administration has proposed that all derivatives contracts be cleared through well-regulated counter parties. also increasing capital of margin requirements, tougher regulation of derivatives dealers and market participants and an increase in the cftc and s.e.c. authority to impose transparency in that market as well as increased enforcement powers. there's a preview of what the secretary will have to say. of course, there's always a questions and answers and it's the answers that sometimes get the treasury secretary into trouble.
mark? >> all right, thank you very much, half on the pearson. a lot of stock tons move this morning. that is coming up next. and later this morning, the new ge subtract nbc universal and a few other properties, what will general electric look like in one year? you're watching "squawk on the street." the market is flat.
welcome back to "squawk on the street." i'm matt nesto. checking inside those indexes. look at constellation brands, one at worst decliners notice s&p 500. cut to sell from neutral at goldman sachs. i think the stock is headed to 16. it's almost there. it's down over 4% right now today. almost a buck give-back at the early going. gamestop is the worst performing stock this northerning in the s&p. off more than 6%. jenny capital, janney montgomery saying they could be hurt by promotions that walmart is running. when you buy a wii you get a gift card, et cetera. that's put that stock under pressure here today. kb homes, one of the best if not this best in the s&p benchmark this morning.
raised to out perform at credit suisse. they think the company is going to get a big fat tax refund. they are also looking forward to the spring selling season. kb homes very strong on that news. mark, back to you. >> thank you, matt. david faber was the first to have it yesterday. ge and comcast have a deal for comcast to own 51% of nbc universal. that includes me aande and erin david. >> 50% of you? >> shares of ge are down just a tad. down 57%. more than twice as much of the s&p. what does ge look like now as it sheds entertainment and concentrates fully on the industrial sector? mary thompson? >> mark, ge without nbc or even an 49% stake in nbc is a step closer to becoming the company that jim immelt wants to create
since he took the helm in 2001. that's firm with businesses concentrating in industries. here's whitacre, out perform on the stock and no conflicts to report. >> well, i think you have ge focused in on technology, infrastructure and energy infrastructure with some residual industrial businesses and financial services that really support and more directly compliment the energy and technology businesses. >> november 9th, deutsche bank analyst wrote 51% of nbc to comcast is $8 billion to liquidity while diluting earns by five cents a share. he co-writes that changes on how ge spends that added capital. oppenheimer's 2010 estimates ge without any contribution from nbc would see revenue drop by $15.8 billion to $134 billion. analysts say the sale means a cleaner ge but one stay that isn't done with the housecleaning yet.
the sale, one of the series expected by a firm now more focused on energy, transportation and commercial finance. the sales likely to include ge's lighting and appliance units put on and taken off the chopping block because of market conditions. he sees he's sales trimming 25 to $30 billion in revenue from ge's top line over the next several years. >> that includes nbc universal, it includes the enterprise solutions businesses, and consumer and industrial. it does not even factor in some of the divest churs you can imagine in ge capital such as consumer. >> since reports of a comcast/nbc jint venture surfaced in november, ge out performed climbing just about 12 1/2%. while losing the peak network may mean a slightly less colorful general electric, look at stock and it appears that the investors are happier with the story that is black and white. >> thank you, mary.
20 minutes into the trading day. here's where we stand right now. mark, we're struggling with the flat line, we're struggling to stay alive right now. just had a point on the dow, s&p and nasdaq in similar situations. we'll have your next edge, as we talk about putting your money in the best possible position heading into the new year. good day to do it. the seesaw can go either way. you make a decision, mark. what else? >> also coming up, her more on the sudden departure of gm's fritz henderson. what it says about government control of the auto giant. this is "squawk on the street" on cnbc. and we are first in business worldwide. xxxxxxxxxxx
quick check on the markets. we should be gaining traction to the upside here. dow's up 13 points. the nasdaq is having a good day, up half a percent. the s&p and the dow are struggling to get a decent run going. your cnbc edge now, david, chairman and chief investment officer at cumberland advisers and sam, contributor and dave
shepherd, certified financial plan we're retirement financial services. dave shepherd, start with you. is this market looking good because it won't go down or bad because it won't go up? >> you know, i think it's so dependent on what mood the market is in. i would say right now it's in a really tenuous place. and so we'll just have to wait and see. the market, a lot of times acts like a manic depressive to the news cycles. lately it's been climbing the wall of worry. so we'll just have to wait and see. that's what i think. >> we raise a little cash in advance of the due bbai issue. you never see just one cockroach. that cash is back in the market. this market is headed higher. before we're done we're going to close the whole lehman waterfall gap. if you turn the clock back one year, the central banks of the world one year ago decided no more lehmans, no more big failures, we're going to lick
question fay t liquefy the world. they're showing up in markets, in all markets worldwide. >> david, i think this will interest mark, never one cockroach. indications from decline in persian gulf is right up in maine. >> absolutely. you see lobsters' prices fall when there's a crisis in the gulf because they like to fly in fresh maine lobsters. that's a report you see in maine, you've got to make your mortgage payment, that's big. we don't see it in new york because new york flies in lobsters all the time. but that's the kind of interdependence that exists worldwide. rip until dubai, the lobsterman suffers in the coast of maine. how about that one? >> i'm blown away. >> you can have melted butter with your lobster, too. it's all right. >> i knew you would like that. >> i would point out to you it is lobsta.
>> lobsta. >> so, dave shepherd, where is the best place i can put my money right now, say, for the next 6 to 12 months? >> things that i like right now, the things that we're looking at are technology and basic materials. and the basic materials, if we do come out of this recession, and that would be my caveat, not 6 to 12 months we need to make sure we're continuing to come out. if we are, basic materials could be a good place to be. that would have a basis in continued infrastructure spending. and the technology, you know, still that cortege infrastructure that could be needed down the road. >> david, same question? >> besides lobsters. >> lowsta. >> large cap over small cap. the small cap play is over. that's now changed. large cap leads, we continue to have an economic recover rry, a bit, tepid for a while. >> all right. thank you. dave shepherd, david.
live from the financial capital of the world in the heart of lower manhattan, welcome to the second fun-filled hour of "squawk on the street." i'm mark haines. 30 minutes now into the trading day. stocks are really, really quiet. al alcoa, topper former of the dow. kb homes, the worse. s&p, upgrade from credit suisse and 32 new 52-week highs on the s&p. >> the markets are trying to decide which way to go. what is causing the -- >> kind of hesitation, i was just talking -- >> continue innocen. >> you have been traveling.
a little punchy. art cashin was just saying we're watching the s&p level. the dollar is little iffy, the market is a little iffy. people are taking a pause yesterday. i was saying yesterday we got a mulligan from that dubai sell-off on friday. back to where we were before thanksgiving. now we're looking ahead to friday and people are taking a loss. >> the jobs report. >> airlines, all that flying you're doing is helping the airlines. continental saying that traffic was up 3% in november. also getting a call from morgan stanley saying this is the best time in the cycle to get into these names. upgrading amr. amr is down 39% year to date. cutting alaska air, one of the performers in the group that supposed. up 1%. southwest is the best performer for the year, big airlines, it's up 8% year to date. disparity in the financials, once again, the big banks are lower. we've got the house financial services committee taking up the too big to fail bill today. see if they decide to vote today and pass that. then the regionals higher once
again. yesterday, citi upgraded the regionals. today, credit suisse upgrading them saying they think they're going to put everything out there in the fourth quarter and after that the earnings will start to turn and look better. in commodities, also got this disparity as well. gold continues to power forward. continuing to see fresh highs here. a lot of the gold mine irs have eliminated their hedges. they are looking to draft up the numbers. the energy sector is lower. bearish number yesterday. >> the gold miners wanting to eliminate the hedges. it's nice when things are going up. but they don't always go up even though the gold bugs think that would be a sacreligious things to say. bertha, thank you very much. let's get to the nasdaq and mike huckman. nasdaq standing up in terms of out performance today, standing out in terms of out performance. >> yes, the nasdaq is going for a trifecta. the third straight up day. right now it's up half a percent. so this latest two-day winning streak started on cyber-monday and speaking of cyber-monday,
experian hitwise is up with the retail traffic results for that day. speaking of winning streeks, amazon.com for the fourth straight year had the most visitors on cyber-monday. it's up almost 1% right now. and did i mention this stock is up almost 175% so far this year? dell and staples also in the top 20 list for cyber-monday visitors. comcast is up just 0.1% after a 2% gain yesterday. but that's not the only deal that we're watching here at the nasdaq. dietrich coffee is up after green mountain upped the bid. they're thinking about what's going to do next. erin, clearly investors think that pizza is going to come back with another higher bid because it's tradesing at 35.17 and green mountain offered a flat $35 a share. back to you. >> thank you, mike. let's show you the crude oil trade.
$77.85. interesting, obviously a lot of cross kurnss. bertha indicated in the commodities market. brian, as we talk about whether gold the k. go higher, interesting that silver headed in the other direction. >> yeah. you know, it's just one of those fascinating things, you know, the debate you're going to have in a few minutes about whether gold is going to become a reserve currency. i would catapult exponential exponentially. do they take profit or continue to ride the train. if you look at the intraday, we hit the high overnight. 1218.40. pull back and now we're back on the rise a little bit despite a little bit of firmer dollar. especially you look at the euro slash dollar cross. that's interesting. i want to look at the other metals, too. copper eased off the 14-months highs. back to the upside again. one trader pointed out $1,000 in gold, silver was around 22. now we're at 19. we're at 1200. there's a lot about this being a specific gold story even though we've had a good boost in all other metals as well.
10:a.m. eastern time, we'll have the numbers for you live. trader action, we're soft. we'll obviously move on that number. let's go to rick in chicago. >> thank you. we're all still amazed at watching gold with a minuscule bump up in the dollar index net change. it certainly doesn't seem to be l slowing down gold. it's not on the highs but only $4, $5 away and well into the $1200 range. tonl at 11:00 eastern we'll learn how many new 3s, are going to sell. tuesday, wednesday, and thursday of next week. a pretty good guess is about 74 to 75 billion. we want to testify it inially monitor how the rather exceptional low rates going into year end to see if it persists. one final thought when you think about central banks may substitute gold for treasuries, a comment by a pimco employee,
one of the directors there, it really does keep in mind that this gold bug issue has moved well beyond the retail-minded investor. mark, back to you. >> thank you very much. there's a newman behind the we'll at gm. chairmanned whitacre will be the coe for now after the resignation of fritz henderson. phil lebeau with more. phil? >> mark, still more questions than answers regarding the future of general motors and certainly what's happening among the leaders at general motors. here's what we do know. ed whitacre, the chairman for the last five months, is now going to be ceo as well. there's no timetable for how long he will remain ceo. most believe it's going to take several months before they find a permanent replacement for this man. fritz henderson, who resigned after a board meeting yesterday, and essentially it comes down to this for fritz henderson. after eight months on the job he could not make the changes or the deals happen quick enough and this is a company hell-bent
on making change as quickly as possible. as a result, he's out. whitacre is in for the meantime. but he says yesterday in a hastefully arranged press conference he indicated that they're going to move as quickly as possible to look for an outsider for the job on a permanent basis. >> to this end, i have taken over the role of chairman and ceo while a search for a new in the and ceo begins immediately. >> and that search is expect ped to take several months. do not expect to find a new ceo at general motors in a matter of weeks. it's going to take a while. the big challenge for ed whitacre, filling the post with the government pay restrictions and also some of the other restrictions that come along with this job. for more on what the challenge is for ed whitacre, check out the blog behindthewheel.cnbc.com. erin, in an hour and a half we will hear from one guy that has made it through the last couple of shake-ups through general motors. bob lutz, vice chairman, he is
here speaking. we will hear from him in an hur and a half or so. that's the latest from gm. back to you. >> thank you, phil lebeau. another big story this morning, the ge/comcast deal is done, mark. >> i know. so are you. >> i'm only half done, cut in half, like you. >> okay. erin, insisting i'm con camera so i can continue to read although you were reading. as david faber first reported, there's nothing left but to process paper. so, david, ge and comcast are just waiting for the vivendi sale agreement to be signed? >> that is correct, mark. tomorrow this time you and i will actually have a press release in front of us that we can read from, perhaps we'll have heard from some of the principles in this deal. lit be announced tomorrow morning again according to sources on all sides of this. we will get the deal itself. and then we'll start to at least dig in a little bit more on some of the numbers behind nbc universal. perhaps get a better sense as to just how incredibly profitable
some of the cable networks are. or to the contrary, how unprofitable the network is. >> let's back up a minute. is this -- is this going to be kind of like aol and time warner? or does this make more sense? i will never forget you and i and joe interviewing steve case and levine that morning and the deal made no sense to any of us, and to our credit it turned out we were right. does this make more sense? >> i think it does. there's a lot less at stake there. that, of course, was one company buying another completely. here of course you've got nbcu staying essentially the same, only taking in cable networks and a change in ownership. the question about vertical integration and whether comcast is ultimately going to gain or prevent erosion in certain parts
of its business as a result of owning content is a good question. there are some who say we don't quite understand why they are willing to do this. but it's hard to imagine any outcome like aol/time warner. >> why does ge keep 49%? is this kind of like a buyout with training wheels, or what? >> yeah, that is in many ways what it is. it gives them a hedge. let's say things improve markedly over the next year. the value of nbcu goes up. they will at least have preserved a good deal of value. remember, 80% to 49% not that much in terms of the sale for them. at the same time, it relieves them of the burden of having allocated assets to this business. it relieves in the management responsibility of this business and ultimately puts ge in a position, mark, to sale the stake in full over time. >> all right. david, thank you very much. >> all right. you know, mark, actually the deal as well still faces a number of regulatory hurdles and
hampton pearson in washington has that part of the story. hi, hampton. >> hi, david. it could take a year to win regulatory approval. the key roles will be played by federal communications commission. either the justice department or the federal trade commission. they'll dissect the antitrust and consumer issues. the most likely scenario that mega merger gets approved after a lot of scrutiny and with conditions. why? well, think of it. comcast is the largest cable tv operator in more than 24 million homes nationwide. it's also the second largest internet service provider with 15 million customers. nbc owns broadcast and cable networks, movie studios and getting a bigger online footprint with hulu, a marriage of content and crdistribution. now, look for competitors across the board and consumer groups to cry foul saying things like the most popular cable channel menu would be controlled by one company. you can also get the attention for regulators and lawmakers by
raising the specter of higher cable rates. in markets like philadelphia and chicago, nbc owns television stations, comcast is a major cable presence. do those tv stations perhaps have to be sold? and will there be guerrilla welfare in local cable sports arena. this is the first big test of the obama administration media regulators and turning into a call to arms for media reformers as "the new york times" pointed out a few weeks ago, at least one public interest group, center for digital democracy, has labelled this deal the equivalent of godzilla swallowing the rockefeller center. mark, erin? >>godzilla swallowing the rockefeller center. at least ge sells it. next, some of the biggest movers in today's early trade. plus, one of the best stocks in the decade up more than 2,000%. we'll tell you what it is later this hour. >> oh, i know what it is.
picture of the senate agricultural committee. tekt is testifying on proposals to talk about derivatives. and they have a lot to do with agricultural related commodities. the white house wants banks and hedge funds to trade these previously unregulated instruments on regulated exchanges. although keep in mind that so far at least in the house financial services committee they would allow you to continue to trade in an unregulated or off-exchange manner any derivative so long as you actually use the derivative. now, as to how much archer daniels is speculating and trade to think side for certain units, it's unclear how that would be handled and that raises a lot of questions. okay. want to bring your attention to stocks on the move. and for that we go to the meg magnificent. nesto at hq.
>> geithner with the sound off looks like a puppet with his hands up. >> he reminds me of a very young robert stack in the "the untouchables." he's got that same way he holds his head and looks up from his eyebrows. >> yeah. and when the questioning gets going that vein gets apumping in the head, too. >> yeah. >> you know what's under pressure this morning, back to my day job, if i still have it, morgan stanley. look at the 89 testimoni89 fina little change, morgan stanley. bottom of the pack. ubs lowering the estimates of morgan, jpmorgan, citi bank and bank of new york here today. morgan appears to be taking the worse of it. ciena is up 5%. nokia just can't let go of a bid for some nortel optic call assets. that deal closed between ciena and them last week. nokia saying we're going to sweet the deal by 5%.
it's not clear whether or not that bid will be accepted. a little bit of stock news. i'll be back again. more later. >> thank you, matthew. just ahead, an outside ceo the answer to gm's problems? what the automaker needs to do now to win back market share. and later, our best of the best series continues. today we highlight the company that's seen its stock soar more than 2,000% this decade. we will reveal the company to you in just a couple moments.
you really have to see whether the work you're doing today is actually getting you to where you want to go a generation from now. we've gone way too quarter by quarter by quarter and we have lost this generational view. >> what we do is we don't spend all that we make in good times and we spend more than we make in bad times just like we're doing this year. and that's the kind of courage you have to have if you're going
to be in the expiration business. >> the key to the downturn, you have to have the balance sheet in reasonableable shape. >> you have to believe in the basic need of energy in this world and you can't just go on fits and starts with regard to being an expiration company. you have to continue to find researss no matter what the volatility is. welcome back to "squawk on the street." i'm darren rovell. many of you heard the situation involving tiger woods this morning. "us weekly" posting a voice mail
from tiger woods to a mistress and tiger woods has now posted something on his website. and this is his comments on the current events as it's dubbed. i have let my family down and i regret those transitions -- transgressions with all my heart. i have not been true to my values and the behavior my family deserves. i am not without faults and i am far short from perfect. i am dealing with my behavior and personal failings behind closed doors with my family. those feelings should be shared by us alone. although i am a well-known person and have made my car here as a professional athlete i have been dismayed to realize the full extent of what tabloid scrutiny really means for the last week my family and i have been hounded to expose intimate details of our personal lives, skipping forward but, no matter how intense curiosity about public figures can be there is an important and deep principle at stake which is the right to some simple human measure of privacy. i realize there are some who don't share my view on that. for me the virtue of pry videos
privacy must be intimate and with my family. i will strive to be a better person and the husband and father that my family deserves. for all of those who have supported me over the years, i offer my profound apology. erin? >> darren, just a quik question. tiger woods has become beloved by men and women, athletes and non-athletes. in no small part for discipline, hard work and character. clearly, no matter what he does in the future, that has -- that image changes. >> yes. >> so there is a real brand question here. what i'm curious as to how significant you think that could be and over what time frame? you know, not like nike or somebody would drop him over there this, right? i mean, i don't know. >> no. >> but it would impact them. >> what i've been told is so far we've had various stanges of comment n comment, no comment. certainly no dropping him. but he was seen as the perfect
man, the perfect golfer. he is no longer that. i think a lot is going to depend on when he does come back to golf, how good is he. that's going to be important for nike golf. but at the same time, there is a little bit of a brand hit. it will depend on how good he is in golf. i think over time, right now it looks like a disaster. over time we'll see how corporations feel they have to respond in this. >> all right. darren rovell, thank you very much. and back to -- well that is a big business story, potentially. but let's get back to the main headline we've been focusing on, the big change of the guard at gm. after just eight months, fritz henderson is out. chairman ed whitacre will be taking over, formerly from the telecom industry. what does this mean for gm? is this an ominous sign or not? the l.a. auto show kicks off today. it's a good time for phil lebeau to get a whole lot of answers. director of auto mo tive research is here. and phil reported this first about fritz henderson yesterday.
i'm curious as to your view. he's not there very long, in the top job. he had been at gm for a long time. does ed whitacre know what he's doing? >> well, i think the surprising thing was not that he moved on fritz henderson. i think a lot of people didn't think he was going to be there for the long haul and that he was really just part of the old guard and he was going to be there as a caretaker, so to speak. but i think the issue yesterday was when it was done. it really caught everybody by surprise. and i think the timing on the move is very bad. not the move itself. i think it's, you know, gm, it startsed to build over the last month. picked up in sales. they really have to push the sales, grab the market share and really prove that they can get those customers of the brands they're closing or the pontiac people, the saturn people. they've got to actively really get them right now. and they're up for grabs. it doesn't appear that they
think they're really pulling it off. >> george, you've got a guy who was at the company for years, knew it like the back of his hand, in eight months or out. either someone at the government who runs gm thought the guy was terrible, or else why? i don't understand why you would leave right now unless there was something wrong. >> first of all the government seems to have no role in this, that's what they're saying this morning. the main issue is henderson and whitacre werer never on the sa page. not talking the same game. i think while fritz had a reputation of being tough, i think he was still seen as an insider doing it the gm way. i think everything started to unravel with the opel deal. when the board of directors went actively against what henderson wanted to do and pull that deal off the table, and i think it started there and ended with saab. it was just one thing after the other. and now it comes out that whitacre was unhappy with the estimates for next year and the
accelerated ipo. everything seems to come out in the wash right now. >> it's going to be interesting to see how this plays out. george, thank. always good to see you. >> thank you. okay. weekly oil inventory report is just a couple moments away. talking about the situation for crude oil, whether we have a demand issue or not in this country. it's coming up on the other side of the break, as well as the instant reaction and, of course, our best ceo of the past decade. we'll be back.
oil prices below $78 a barrel. they have been weakening. high inventor tos of crude supplies. we just saw that crude supply rose by 2.1 million barrels in the past week. gas li gasoline up by 4 million barrels last week. distillate fuel supplies deen clined by 1.2 million barrels. a huge build in gasoline supplies. as a result, we are seeing oil prices come off even more. down almost $1 right now. $77.42 for the price of crude. keep in mind we are looking still even with this decline in distillate fuel supplies at a very high level of distillate in storage here on land as well floating at sea. erin, back to you. >> thank you very much. all right. 10:30 on wall street, 7:30 on the west coast. the adp jobs report shows a slight improvement in november from october. superstar tiger woods admits to what he calls, quote, unquote,
transgressions of the heart. is that what we call it now? >> sounds like a country western tune. >> mike jackson tells cnbc surprised and concerned about the departure of fritz henderson as gm's ceo. how are the markets, mark? >> let's see. the dow and the s&p, well, they're all up differently. dell up 0.2%. s&p up 0. 4%. up 1%. internally we should have positive ratios, right? let's check it out. on the big board, oh, yeah, almost 3-1 positive on the big board. very positive. on the nasdaq, that also is almost 3-1. >> after acquiring marceles and drilling in pennsylvania, even sliding natural gas prices can't slow this stock down. it's one of the best of the past decade. now we will reveal it.
to drum roll, company shares are up more than 2,000% over the past ten years. wow. it's like a reverse black diamond. here to tell us the secret is john pinkerton. good to have you with us, sir. >> thanks, erin. >> not often we hear about drilling in pennsylvania anymore. >> that's right. >> there's a lot left to find in the u.s.? >> well, we -- our industry roughly ten years ago has really made a huge paradigm shift in technology to unlock natural gas that's been around for a while. and we knew there was a lot of natural gas in the rocks in pennsylvania. simply didn't have the technology nor the product to get it out. after the barnett shell was discovered we went up in october 2004 drill all first well. and lo and behold, it's worked. and now people think we might have found the largest gas field in the united states. >> where is physically the shell? >> it's -- mark, it's primarily in pennsylvania. >> where in pennsylvania?
>> just, you know, from the southwest and it curves up through the northeast and will a. little bit up into new york state and a little bit down into west virginia as well. it's very little of it, quite frankly, is in new york state. most of it, from what we see from our research, is going to be in pennsylvania. >> the reason i ask is i own property up there and people have wanted to drill underneath it. >> right. >> which you can't do until i say -- >> absolutely. >> partnership with the land owner. >> which i haven't done. but anyway, give us a sense to just how big this is. it can increase our supply by what percent? >> well, let me put it in this perspective, mark. when the barnett shell was found about 15 years ago, and it took about ten years because it was the first one, today it's the largest producing gas field in the united states. in about a ten-year period, which is incredible.
and people say the marcellis could be 10 to 15 20 times bigger when all of this adds up it seems like we have enough natural gas, a lot of it. yesterday i was on the way home, stopped in quatar and they're thing is to put on natural gas and hoping we're going to build terminals. is this a ridiculous proposition, we don't need the whole getting natural gas from the middle east because we have plenty here at home? >> there's been a huge paradigm shift in our business that's just hapt happened where the shell plays have become economic and known and people know what's going on. a lot of the l and g stuff started before that. if you knew about the shell plays back then, the l and g thing would have slowed down dramatically. and that's the huge shift that's happening in our business. and we're all trying to figure out what's going on. we went from a relatively small quantity of natural gas and was pretty volatile, now we think we
have over 100 years worth of supply of natural gas that, you know, we could tap and, you know, get away from foreign oil and also get away from -- >> it's an interesting angle because when you look at a city like doha and gigantic mars-like building it's built on the expectation that we're going to need that gas. now you say we have 100-year supply at home. ramifications are great around the world. >> pardon me with my fascination from the nitty-gritty. but aren't these shell assets something that you have to negotiate an awful lot of individual contracts to get to the mass, or can you, like get my neighbor on one side and another neighbor and thereby tap the resource without me? >> well, no, no, mark. i mean, to produce the gas underneath your land, we've got to get your approval. >> so this is, if not technically difficult, legally tedious? >> it's absolutely legally
tedious. the good news for our shareholders we've been in appalachia for 25 years. we own 1.4 million acres of those leases already in pennsylvania, of which about 900,000 of that we think is perspective for the marcellus. we have already made the agreements with the land owners, drilling underneath the properties as we speak. and obviously a lot of the land owners like us a lot because we're giving them big checks and, you know, from that, you know, they're able to expand their business and create jobs and all the other things that comes along with it. >> all right. thank you very much. appreciate it. interesting. pretty incredible, mark, what technology can do. >> this issue popped up in pennsylvania not long ago, within the last five years. all of a sudden land owners were getting letters, we want to drill. >> that's like back in texas when they used to try to negotiate back in the days when they would go around and try to basically just -- what do they call it, wildcatting, right? coming up, why one
well-known economists say inflati inflation pressures will drive gold through $5,000 an ounce. dow up 7% over the past month. s&p, 6% higher. does that mean you should trust it at all? and to the on "street signs" we get the latest read from the u.s. economy from the beige book usually a big market mover. we have that for you on "street." but now more "squawk on the street."
okay. some breaking headlines from timothy geithner. we want to start with this one. he's testifying before the agricultural exit thee and says that we are, quote, close to the point where the united states can stop making new t.a.r.p. commitments. mark? that headline -- i thought he had. >> i thought we had gotten to that point many, many months ago. i don't know how most people watching will react to that
headline. i think most people thought it was eight months in the rearview m mirror. so that headline concerns. he then continued to say he soon will make suggestion on how to end t.a.r.p. safely. but the fact that we are not yet but are only close to the point where we don't have to use more t.a.r.p. money, well -- >> that is news to me. >> yeah. all right. gold up another 1% after hitting another record high over night. will the run continue into next year and beyond? here he comes, our favorite gold bug, peter shipp, author of "how to profit from the economic collapse." he sees gold likely going as high as 5,000. lou grasso, gold trade we're millennium futures, a little more cautious about gold in the long term. lou, make the cautious case. >> well, i think that what we're
seeing is gold is being -- having a big moved up in the last year and a half in anticipation of people talking about inflation down the road. i've been one of them. i've been calling for gold to hit the 1200 mark since trading around 150. we haven't seen inflation creep in yet. we are will see it come into the economy. i think what's going to happen is down the road you're going to see the buy the rumor, sell the fact. when gold had that spike back in 1980, inflation had already run through the economy and then it hit the doldrums for 25 years. i think when inflation starts to show its head we can get that super spike from 1500 to 1800. but i think from then you're going to start seeing it backing off. >> peter schiff, this sounds like those guys who wrote the book "dow 36,000." $5,000 gold sounds kind of optimistic.
>> well, you know, i was talking agent gold going up when it was, you know, $250, $300 an ounce. i was on the show with you on "squawk box" four years ago -- >> all right, let him go, mark. let him go. let him go a word in here. >> you were right! okay? now, let's address the rest. >> no, but my point is it's the same argument. when you said you didn't care about the price of gold when it was under $500, you weren't buying it. you could make the same argument today. $1200 is not expensive considering all the money we've traded, all the money we're going to create. not only the federal reserve but central banks around world. the gold price is headed higher. it's not just going to hit 5,000 this year. it's not going to hit it next year. it's going to hit it eventually. maybe before barack obama leaves the white house. >> i did see an interesting or hear an interesting fact over the last several weeks that the production of gold is actually declining. is that right? >> well, you know, the cost of mining has gone up a lot. inflation has driven up the cost
of mining gold. so the economics are not there. if you happen to already own the gold, you know, you can mine it profitably. but if you have toeks more for it and the exploration budgets were cut to the bone over the years. so i don't think there's is a lot of gold to meet the new demand that's coming because gold is money. gold is not just some other commodity. when central banks makes currencies unattractive with zero interest rates and all this printing people are going to go back to traditional money and save in ghoeold, transact in go and demand is going to explode. >> i agree with part of what you're saying but as far as using gold as everyday transactions for everyday people, i don't see that happening. i don't see that the masses are exposed to enough gold that they can use it for everyday transactions. >> i see it happening in my business. i mean, people are buying gold for my firm every day and the numbers are growing and growing and growing. people are choosing to save in goeld gold. you don't have to physically take gold bullion into a store and buy something but you can
have gold in a bank and use it as a form of savings to finance purchases. >> right. but your customers when you say you see it in your business your customers are coming to you for gold. i'm talking about the average person out there on the street. >> these are average people. i'm dealing with average people. i'm not dealing with hedge funds. i'm dealing with retail investors. >> i understand. >> more doing gold. >> the investors you're dealing with i'm sure have a higher net worth than the people out there, the ordinary person on the street. >> you know, most of them do. but i have a lot of students. i have young kids. i get high school kids e-mailing me when do i buy gold, how do i get gold. these are not high net worth individuals. >> it's things like that that scare me a little bit. you know when the public starts to get in the public is usually the last in and the last out. >> they're barely in. this is the beginning. i agree, when everybody is in. this is not -- which is why i believe we can go 15 to $1800. i think we can see that. but i think when you start talking about peak gold and cost
of production going up -- >> i've got to dut you off. the current says lou got the last word. thank you for that. next, the traders take on these markets to finish up the year. peter costa is literally on deck. >> the dow and the s&p off their highs of the morning. maybe the headlines for geithner stick around. national car rental knows i'm picky. so, at national, i go right past the counter... and you get to choose any car in the aisle. choose any car? you cannot be serious! okay. seriously, you choose. go national. go like a pro. green shoots. recovery. they say with fingers crossed that the worst is behind us. maybe it's time to get back in the market. but different this time. with more control. and more freedom.
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welcome back. the securities and exchange commission continues to increase its scrutiny of trading by hedge funds, particularly what they at least are looking for in terms of potential insider trading by said hedge funds. and many of those hedge funds have received s&ubpeonas, which is like a sweep by the south korea trying to understand the relationships between hedge funds. investment banks, lawyers, accountants, and many others in a significant significant number of transactions. you just saw page one of the subpoena that i had gotten ahold
of dated november 5th. this is separate from the ongoing investigation by the hedge fund, gallieon. this is broader, much earlier, say sources, but involves 40, 50 hedge funds. what are they looking for? it appears they're looking for trading in nine separate transactions. here they are. merck and it's acquisition. pfizer's acquisition of wyeth -- best buy and napster. ansys and ansoft, sears, and the ninth deal we see there. pe joint venture of genesis
health care '07. the subpoena asks for requests, documents and other things from july 1st 2006, through the present. there's a look at the list. what a number of people who know these investigations well on the law enforcement side have told me is that the requests itself, very burdensome and broader than has been the case in the past. for example, the request goes to things like all e-mail and text and instant messages related to designated acquisitions. blackberry, trio, i-phone communications by these individuals. there we go. more. conversations or communications with any account assistant, financial adviser, legal counsel. again, i'm told my people
familiar with these subpoenas that these kinds of requests are broader in nature than they typically see. if you're at a hedge fund, it's going to take you a lot of time to get all the information they're after. we'll see where this ends up in terms of whether or not there's a pattern of insider trading found and whether we get to a point where indictments are made, but certainly indicative of increased pressure on the hedge fund industry. >> thank you. the gains, 7% for the dow, 6% for the s&p. nasdaq, 6% over the last month. all those are up between 60 and 70% and yet, everybody despises a rally. let's find out whether that fear is justified or nervousness.
peter and jonathan -- jonathan, let's start with you. everybody hates it. that could mean it's a bad thing or the best indicator ever. >> i think all fundamentals are out the window. market's back to pre-dubai levels. very important to look at. this week, clearly we've got a lot of economic data and everyone's pointing to this number tomorrow. we have to make sure we focus on that number. the reoccurring claims are very important. >> jobless claims are tomorrow, then we get the big number. has it all come down to jobs? is there anything that could derail this? >> i'm going to derail it now. that was the month anniversary of when i felt the market was perfectly priced at 900. now, we're up 7% and i'm walking around with egg on my face.
i think the market is ahead of itself. there's room for improvement and things that we still have to worry about. unemployment is number one thing. when you have 10, 11% of the population not working, probably 25% that's on the cusp. you've got to be careful about how much money and stock you put into this rally when we could go back into the second part of the recession. i'm worried about falling back into a recession because we can't get away from unemployment. >> jonathan, are you just whistling past the graveyard? >> at this point here, you have to look at the market. the way gold has been is important, but unemployment you have to continue to focus on. it affects spending, consumers. >> and it looks awful. >> it does, but at this point, the sentiment of the market, this market continues to want to
rally higher. whether you believe it or not. >> so, the difference here is you drink the kool-aid. the still skeptical peter and more optimistic jonathan, thank you very much. >> all better than crystal light. >> or tang. ord, we've helped you seize them... for over 200 years. protecting what you have today. preparing you for tomorrow. visit thehartford.com to learn more. and with the hartford behind you, achieve what's ahead of you. the hartford. insurance. investments. retirement. ♪
oh, it's time for "six in 60." >> i missed that the most while i was on vacation. >> i'm sure you did. i got out of it in dubai, too. here we go. kb home up to outperform from neutral. obviously not a big move there. toll brothers reports before the opening norm. bunge. >> i have no idea. >> farm products company, soy mill, initiating hold is $70 and dole food company trading down as four firms initiating coverage at neutral mark.
>> consolation brands, firm's target price remains $16. expects results in wine to be below expectations. dreamworks animation upgraded to buy from neutral. p.f. chang's china bistro. price target is 41. >> i don't think they're going to like it. i've eaten there. food is good. >> if you eat anywhere too much -- any way. where are we? we're up 21 and the up volume -- looks like a good day shaping up. what's coming up on "street signs"? >> we've got the breaking headlines, which could be a